Altisource Announces Third Quarter 2022 Financial Results

LUXEMBOURG, Nov. 03, 2022 (GLOBE NEWSWIRE) — Altisource Portfolio Solutions S.A. (“Altisource” or the “Company”) (NASDAQ: ASPS), a number one supplier and market for the actual property and mortgage industries, immediately reported monetary outcomes for the third quarter 2022.

“I am encouraged by our third quarter results and performance. During the quarter, we focused on improving segment margins, growing sales wins and reducing costs. Our Servicer and Real Estate segment continues to benefit from the restart of the default business and operational efficiencies with 45% year-over-year Adjusted EBITDA growth on 14% service revenue growth. In our Origination segment, we had strong sales wins that we estimate represent $10 million of annualized revenue on a stabilized basis,” stated Chairman and Chief Executive Officer William B. Shepro.

Mr. Shepro additional commented, “The market tailwinds from the restart of the default market, sales wins and cost discipline, should help us return to growth and create substantial value for our stakeholders. Our countercyclical default business should further benefit from a deteriorating economic environment.”

Third Quarter 2022 Highlights⁽¹⁾

Corporate and Financial:

• Ended the third quarter 2022 with $63.8 million of money and money equivalents, a 75% enhance from the third quarter of 2021
• Ended the third quarter 2022 with $183.4 million of internet debt⁽²⁾, a 21% discount from the third quarter of 2021
• Third quarter Adjusted earnings earlier than curiosity, tax, depreciation and amortization (“EBITDA”)⁽²⁾ lack of $6.5 million represents a $1.1 million enchancment over the third quarter of 2021
• Reduced third quarter 2022 Corporate prices by $5.9 million, representing a 25% discount, in comparison with the third quarter 2021 from the sale of Pointillist, prices financial savings initiatives and the project of gross sales and advertising workers to the segments starting on January 1, 2022

Business Highlights:

• The Servicer and Real Estate phase continues to learn from the restart of the default business with 45% year-over-year Adjusted EBITDA⁽²⁾ progress on 14% service income progress
• The Origination phase had sturdy gross sales wins that we estimate symbolize $10 million of annualized income on a stabilized foundation
• The present unweighted gross sales pipeline within the Servicer and Real Estate business is roughly $116 million on a stabilized foundation, representing $32 million to $40 million in annual income primarily based upon our forecasted chance of closing
• The present unweighted gross sales pipeline within the Origination business is roughly $83 million on a stabilized foundation, representing $21 million to $26 million in annual income primarily based upon our forecasted chance of closing

Industry Highlights:

• Industrywide foreclosures initiations had been 271% greater for the three months ended September 30, 2022, in comparison with the identical interval in 2021 (though nonetheless 51% decrease than the identical pre-COVID-19 interval in 2019)⁽³⁾, because the foreclosures market is starting to get better following expiration of the Federal authorities’s foreclosures moratorium on July 31, 2021 and the CFPB’s non permanent loss mitigation measures on December 31, 2021
• Industrywide foreclosures gross sales had been 30% greater for the three months ended September 30, 2022, in comparison with the identical interval in 2021 (though nonetheless 65% decrease than the identical pre-COVID-19 interval in 2019)⁽³⁾
• Industrywide mortgage originations are forecasted to be 55% decrease for the three months ended September 30, 2022, in comparison with the identical interval in 2021⁽⁴⁾

Third Quarter 2022 Financial Results

• Service income of $36.3 million
• Gross revenue of $4.0 million, representing 11% of service income
• Loss earlier than revenue taxes and non-controlling pursuits of $(14.5) million
• Adjusted pre-tax loss attributable to Altisource⁽²⁾ of $(11.4) million
• Adjusted EBITDA⁽²⁾ of $(6.5) million
• Net loss attributable to Altisource of $(14.4) million, or $(0.89) per diluted share
• Adjusted internet loss attributable to Altisource⁽²⁾ of $(11.3) million, or $(0.70) per diluted share

Third Quarter 2022 Results Compared to the Third Quarter 2021 (unaudited):

• Third quarter 2022 loss from operations consists of bills associated to price financial savings initiatives and different of $0.5 million in comparison with $0.5 million for the third quarter of 2021 ($1.1 million and $3.2 million for the year-to-date September 30, 2022 and 2021, respectively). Third quarter and year-to-date September 30, 2021 loss from operations consists of losses from Pointillist of $2.1 million and $7.1 million, respectively (no comparable quantities in 2022)
• Third quarter 2022 and third quarter 2021 internet loss attributable to Altisource consists of $0.2 million and $0.3 million, respectively ($2.0 million and $1.3 million for year-to-date September 30, 2022 and 2021, respectively) of expense for sure revenue tax objects associated to changes to international revenue tax reserves and withholding tax on beforehand accrued taxes associated to a big one-time repatriation of money from sure of our subsidiaries

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  (1)   Applies to 2022 until in any other case indicated
  (2)   This is a non-GAAP measure that’s outlined and reconciled to the corresponding GAAP measure herein
  (3)   Based on information from Black Knight’s Mortgage Monitor stories and Black Knight’s First Look at September 2022 Mortgage Data
  (4)   Based on information from the October 23, 2022 and September 19, 2022 MBA Mortgage Finance Forecast

Forward-Looking Statements

This press launch comprises forward-looking statements that contain a lot of dangers and uncertainties. These forward-looking statements embrace all statements that aren’t historic reality, together with statements that relate to, amongst different issues, future occasions or our future efficiency or monetary situation. These statements could also be recognized by phrases akin to “anticipate,” “intend,” “expect,” “may,” “could,” “should,” “would,” “plan,” “estimate,” “seek,” “believe,” “potential” or “continue” or the destructive of those phrases and comparable terminology. Such statements are primarily based on expectations as to the longer term and will not be statements of historic reality. Furthermore, forward-looking statements will not be ensures of future efficiency and contain a lot of assumptions, dangers and uncertainties that would trigger precise outcomes to vary materially. Important components that would trigger precise outcomes to vary materially from these prompt by the forward-looking statements embrace, however will not be restricted to, the dangers mentioned in Item 1A of Part I “Risk Factors” in our Form 10-Okay submitting with the Securities and Exchange Commission, as the identical could also be up to date sometimes in our Form 10-Q filings. We warning you to not place undue reliance on these forward-looking statements which mirror our view solely as of the date of this report. We are below no obligation (and expressly disclaim any obligation) to replace or alter any forward-looking statements contained herein to mirror any change in our expectations with regard thereto or change in occasions, situations or circumstances on which any such assertion relies. The dangers and uncertainties to which forward-looking statements are topic embrace, however will not be restricted to, dangers associated to the COVID-19 pandemic, buyer focus, the timing of the anticipated enhance in default associated referrals following the expiration of foreclosures and eviction moratoriums and forbearance applications, the timing of the expiration of such moratoriums and applications, and another delays occasioned by authorities, investor or servicer actions, the use and success of our services and products, our capacity to retain present clients and entice new clients and the potential for growth or modifications in our buyer relationships, expertise disruptions, our compliance with relevant information necessities, our use of third occasion distributors and contractors, our capacity to successfully handle potential conflicts of curiosity, macro-economic and trade particular situations, our capacity to successfully handle our regulatory and contractual obligations, the adequacy of our monetary assets, together with our sources of liquidity and talent to repay borrowings and adjust to our Credit Agreement, together with the monetary and different covenants contained therein, in addition to Altisource’s capacity to retain key executives or workers, habits of shoppers, suppliers and/or opponents, technological developments, governmental rules, taxes and insurance policies. The monetary projections and situations contained on this press launch are expressly certified as forward-looking statements and, as with different forward-looking statements, shouldn’t be unduly relied upon. We undertake no obligation to replace these statements, situations and projections on account of a change in circumstances, new info or future occasions.

Webcast

Altisource will host a webcast at 10:00 a.m. EDT immediately to debate our third quarter. A hyperlink to the reside audio webcast can be accessible on Altisource’s web site within the Investor Relations part. Those who wish to take heed to the decision ought to go to the web site no less than fifteen minutes previous to the decision to register, obtain and set up any essential audio software program. A replay of the convention name can be accessible through the web site roughly two hours after the conclusion of the decision and can stay accessible for about 30 days.

About Altisource

Altisource Portfolio Solutions S.A. is an built-in service supplier and market for the actual property and mortgage industries. Combining operational excellence with a set of modern providers and applied sciences, Altisource helps clear up the calls for of the ever-changing markets we serve. Additional info is out there at www.Altisource.com.

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in hundreds, besides per share information)
(unaudited)

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED BALANCE SHEETS
(in hundreds, apart from per share information)
(unaudited)

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in hundreds)
(unaudited)

ALTISOURCE PORTFOLIO SOLUTIONS S.A.
NON-GAAP MEASURES
(in hundreds, besides per share information)
(unaudited)

Adjusted working loss, pretax loss attributable to Altisource, adjusted pretax loss attributable to Altisource, adjusted EBITDA, adjusted internet loss attributable to Altisource, adjusted diluted loss per share, money flows utilized in working actions much less additions to premises and gear and internet debt, that are offered elsewhere on this earnings launch, are non-GAAP measures utilized by administration, present shareholders, potential shareholders and different customers of our monetary info to measure Altisource’s efficiency and don’t purport to be options to loss from operations, loss earlier than revenue taxes and non-controlling pursuits, internet loss attributable to Altisource, diluted loss per share, money flows utilized in working actions and long-term debt, together with present portion, as measures of Altisource’s efficiency. We consider these measures are helpful to administration, present shareholders, potential shareholders and different customers of our monetary info in evaluating working profitability and money movement technology extra on the premise of constant price and money flows as they exclude amortization expense associated to acquisitions that occurred in prior durations and non-cash share-based compensation, in addition to the impact of extra important non-operational objects from earnings, money flows from working actions and long-term debt internet of money on-hand. We consider these measures are additionally helpful in evaluating the effectiveness of our operations and underlying business traits in a way that’s per administration’s analysis of business efficiency. Furthermore, we consider the exclusion of extra important non-operational objects permits comparability to prior interval efficiency and pattern evaluation. Specifically, administration makes use of adjusted internet loss attributable to Altisource to measure the on-going after tax efficiency of the Company as a result of the measure adjusts for the after tax impression of extra important non-recurring objects, amortization expense regarding prior acquisitions (a few of which fluctuates with income from sure clients and a few of which is amortized on a straight-line foundation) and non-cash share-based compensation expense which may fluctuate primarily based on vesting schedules, grant date timing and the worth attributable to awards. We consider adjusted internet loss attributable to Altisource is beneficial to present shareholders, potential shareholders and different customers of our monetary info as a result of it gives an after-tax measure of Altisource’s on-going efficiency that permits these customers to carry out pattern evaluation utilizing comparable information. Management makes use of adjusted diluted loss per share to additional consider adjusted internet loss attributable to Altisource whereas making an allowance for modifications within the variety of diluted shares over the comparable durations. We consider adjusted diluted loss per share is beneficial to present shareholders, potential shareholders and different customers of our monetary info as a result of it additionally permits these customers to guage adjusted internet loss attributable to Altisource on a per share foundation. Management makes use of Adjusted EBITDA to measure the Company’s total efficiency (with the changes mentioned earlier with regard to adjusted internet loss attributable to Altisource) with out regard to its capitalization (debt vs. fairness) or its revenue taxes and to carry out pattern evaluation of the Company’s efficiency over time. Our efficient revenue tax fee can range primarily based on the jurisdictional mixture of our revenue. Additionally, because the Company’s capital expenditures have considerably declined over time, it gives a measure for administration to guage the Company’s efficiency with out regard to prior capital expenditures. Management additionally makes use of Adjusted EBITDA as one of many measures in figuring out bonus compensation for sure workers. We consider Adjusted EBITDA is beneficial to present shareholders, potential shareholders and different customers of our monetary info for a similar causes that administration finds the measure helpful. Management makes use of internet debt in evaluating the quantity of debt the Company has that’s in extra of money and money equivalents and fairness securities. We deduct funding in fairness securities from debt in arriving at this measure as a result of our Senior Secured Term Loan requires the Company to make use of any proceeds from the sale of fairness securities to repay the Senior Secured Term Loan. We consider internet debt is beneficial to present shareholders, potential shareholders and different customers of our monetary info for a similar causes administration finds the measure helpful.

Altisource operates in a number of international locations, together with Luxembourg, India, the United States and Uruguay. The Company has differing efficient tax charges in every nation and these charges could change from 12 months to 12 months. In figuring out the tax results associated to the changes in calculating adjusted internet loss attributable to Altisource and adjusted diluted loss per share, we use the tax fee within the nation during which the adjustment applies or, if the adjustment is acknowledged in multiple nation, we separate the adjustment by nation, apply the related tax fee for every nation to the relevant adjustment, after which sum the consequence to reach on the complete adjustment, internet of tax. In 2019, the Company acknowledged a full valuation allowance on its internet deferred tax belongings in Luxembourg. Accordingly, for 2022 and 2021, the Company has an efficient tax fee of near 0% in Luxembourg.

Following the 2019 creation of Pointillist as a separate authorized entity, Altisource had no ongoing obligation to fund Pointillist, Pointillist was positioned to and targeted on elevating third-party capital and Pointillist was an unrestricted subsidiary below our Senior Secured Term Loan. Additionally, Pointillist was not a part of Altisource’s core, regular, recurring business. For these causes, in 2020 we started including again the losses of Pointillist in calculating adjusted internet loss attributable to Altisource, adjusted diluted loss per share, and Adjusted EBITDA.

It is administration’s intent to supply non-GAAP monetary info to reinforce the understanding of Altisource’s GAAP monetary info, and it ought to be thought of by the reader along with, however not as an alternative of, the monetary statements ready in accordance with GAAP. Each non-GAAP monetary measure is offered together with the corresponding GAAP measure in order to not suggest that extra emphasis ought to be positioned on the non-GAAP measure. The non-GAAP monetary info offered could also be decided or calculated in a different way by different firms. The non-GAAP monetary info shouldn’t be unduly relied upon.

Adjusted working loss is calculated by eradicating intangible asset amortization expense, share-based compensation expense, price of price financial savings initiatives and different and Pointillist losses from loss from operations. Pretax loss attributable to Altisource is calculated by eradicating non-controlling pursuits from loss earlier than revenue taxes and non-controlling pursuits. Adjusted pretax loss attributable to Altisource is calculated by eradicating non-controlling pursuits, intangible asset amortization expense, share-based compensation expense, price of price financial savings initiatives and different and Pointillist losses from loss earlier than revenue taxes and non-controlling pursuits. Adjusted EBITDA is calculated by eradicating the revenue tax provision, curiosity expense (internet of curiosity revenue), depreciation and amortization, share-based compensation expense, price of price financial savings initiatives and different and Pointillist losses from internet loss attributable to Altisource. Adjusted internet loss attributable to Altisource is calculated by eradicating intangible asset amortization expense (internet of tax), share-based compensation expense (internet of tax), price of price financial savings initiatives and different (internet of tax), Pointillist losses (internet of tax), and sure revenue tax associated objects, internet from internet loss attributable to Altisource. Adjusted diluted loss per share is calculated by dividing internet loss attributable to Altisource after eradicating intangible asset amortization expense (internet of tax), share-based compensation expense (internet of tax), price of price financial savings initiatives and different (internet of tax), Pointillist losses (internet of tax) and sure revenue tax associated objects by the weighted common variety of diluted shares. Cash flows utilized in working actions much less additions to premises and gear is calculated by eradicating additions to premises and gear from money flows utilized in working actions. Net debt is calculated as long-term debt, together with present portion, minus money and money equivalents.

Reconciliations of the non-GAAP measures to the corresponding GAAP measures are as follows:

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Note: Amounts could not add to the entire on account of rounding.

⁽¹⁾ September 30, 2021 excludes $1.3 million of Pointillist debt that’s convertible into Pointillist fairness